Exxon Reportedly Eyes North Sea Asset Sale

  • Aug 14, 2019
  • Rigzone

ExxonMobil is eyeing a sale of its UK North Sea portfolio, according to media reports.

When asked for comment on the subject, an ExxonMobil spokesperson told Rigzone, “we do not comment on industry rumours and speculation”.

Responding to the reports, Neivan Boroujerdi, a principal analyst for North Sea upstream at Wood Mackenzie (WoodMac), said, “a proposed UK exit was expected” and revealed that WoodMac valued the portfolio at around $2 billion.

“Combined with its Norwegian assets, which ExxonMobil recently announced its intention to market, [this] could see the supermajor reach one-third of the way to meeting its $15 billion divestment target,” Boroujerdi said in a statement sent to Rigzone.

“An active phase of portfolio high-grading will complement and strengthen its aggressive investment-led strategy, centred around its flagship projects in Guyana, U.S. tight oil and liquefied natural gas,” Boroujerdi added.

The WoodMac representative noted that the UK business is attractive and “highly” cash generative, “with operating costs around half of the UK average”.

Boroujerdi said the focus for any new buyer will be on increasing recovery and pushing out abandonment costs. The analyst added, however, that “given the portfolio is operated through a 50-50 joint venture with Shell”, investment plans will “need to be aligned with the Anglo-Dutch major”.

In June, an ExxonMobil spokesperson confirmed that the company was “testing market interest” for its non-operated producing assets in Norway.

“ExxonMobil continually reviews its assets for contribution toward meeting the company’s operating needs, financial objectives and potential value to others,” the spokesperson told Rigzone at the time.

ExxonMobil has been a “major investor” in the UK's offshore oil and gas industry since the first exploration activities in the North Sea began in 1964, according to the company’s website.

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